UPDATE 2-South Africa’s Discovery could target India

* Year headline EPS 277.7 cents vs 224.1 cents

* Revenue 7.86 billion rand vs 5.19 billion

* Shares up 1.9 percent vs slight decline in wider market

(Adds CEO comments, details)

By David Dolan

JOHANNESBURG, Sept 2 (BestGrowthStock) – South African health
insurer Discovery (DSYJ.J: ) could target fast-growing India
eventually as it explores opportunities in Asia, its chief
executive told Reuters.

Discovery would like to lift its stake in its joint venture
with Chinese group Ping An Insurance (2318.HK: ) (601318.SS: ) to
nearly 25 percent from 20 percent if China’s regulator would
allow it, Adrian Gore also said in an interview on Thursday.

Discovery has weathered the financial crisis and subsequent
downturn in Africa’s biggest economy better than some rivals due
to its emphasis on health insurance, which is less sensitive to
the economic cycle than life insurance.

Discovery, South Africa’s largest health insurer and
third-largest life insurer by market value, has been bulking up
by focusing on emerging markets and fast-growing areas in
developed markets.

The company on Thursday reported a 24 percent rise in
full-year profit and said it was positioned for further growth.

“The two countries that I think are exciting for us are
India and China,” he told Reuters following Discovery’s
full-year earnings.

“We keep our minds open to opportunities in Asia generally,”
he said, adding that Discovery would consider India expansion
“in time”.

Foreign health insurers are increasingly looking for
opportunities in India, given its large population and growing
middle class.

But India’s government caps foreign direct investment in the
insurance sector, making it difficult for foreign players to
take big stakes in local firms. [ID:nLDE66R01D]

PING AN STAKE

Discovery said last month it would pay about $29 million for
a 20 percent stake in a joint venture with Ping An, China’s
second-largest insurer.

The South African company had originally planned to buy just
under 25 percent of the joint ventrue, but was forced by Chinese
regulators to scale that back.

“If we could get to 24.99 (percent), we’d like to,” Gore
said.

In May Discovery said it would buy a unit of Britian’s
Standard Life Group (SL.L: ) for 1.56 billion rand ($214 million),
to tap growing demand for private healthcare in that country.

It is also expanding its “wellness” business in the United
States to benefit from demand for exercise and nutrition
programmes.

Headline earnings per share totalled 277.7 cents in the year
to end-June, compared with 224.1 cents in the same period a year
earlier, helped by the health insurance business.

Headline EPS is the main gauge of profit in South Africa and
excludes certain one-time items.

Revenue totalled 7.86 billion rand, compared with 5.19
billion rand a year earlier.

Shares of Discovery were up 1.9 percent at 36.23 rand as of
1308 GMT, outpacing a 0.14 percent decline in Johannesburg’s
All-share index (.JALSH: ).
(Editing by Michael Shields)

UPDATE 2-South Africa’s Discovery could target India